The gold and silver market under pressure due to geopolitical tensions

International financial markets continue to react strongly to geopolitical tensions and economic uncertainty. The recent escalation of the conflict in the Middle East has once again shown how sensitive commodity markets are to global events. Gold, silver, and oil are currently at the center of investors’ attention.

Oil prices rise due to disruptions in the Strait of Hormuz

One of the main factors is the disruption of energy transport around the Strait of Hormuz, one of the most important routes for global oil trade. Approximately 20% of global oil production passes through this corridor.

Due to attacks on energy infrastructure and tankers, oil prices have once again risen toward $100 per barrel. This increases uncertainty in the markets and creates renewed inflation concerns worldwide.

When energy prices rise, this often leads to higher production costs and increasing inflationary pressure. Central banks usually respond by keeping interest rates higher for longer.

Gold remains an important safe haven

Traditionally, investors turn to gold in times of uncertainty. That is also the case now. Gold is currently trading around $5,100 per ounce, close to the highest levels seen in the recent period.

However, gold is rising less sharply than some investors might expect. This is mainly due to two factors:

• A strong U.S. dollar
• Higher bond yields

Because gold does not generate interest, it becomes less attractive when rates rise and the dollar strengthens.

Silver remains more volatile than gold

Alongside gold, silver is also receiving strong attention. Silver holds a unique position because it is both an investment metal and an industrial metal. It is used in technology, solar panels, and electronics, among other sectors.

As a result, silver often reacts more strongly to economic developments than gold. When investors step in, the price can rise quickly, but in times of uncertainty, it can also correct more sharply.

Declining physical silver inventories

What is currently drawing additional attention in the market is the decline in available physical silver inventories on international exchanges.

In both New York (COMEX) and on Chinese exchanges, inventories have clearly declined in recent months. At the same time, demand for physical silver remains strong.

When demand for physical metal continues to rise while available inventories decline, this can eventually lead to additional volatility in the silver price.

What does this mean for investors?

The combination of geopolitical tensions, rising energy prices, and economic uncertainty means that the precious metals market remains highly sensitive to news and economic data for the time being.

For many investors, gold and silver therefore remain important ways to protect their portfolios against uncertainty and inflation.

Precious metals remain a stable store of value

Historically, gold and silver have proven to preserve stable value during periods of economic unrest. That is why precious metals continue to play an important role in wealth protection worldwide.

At Edelmetaal Richard, we monitor international markets on a daily basis in order to inform our clients as accurately as possible about developments in gold and silver prices.